Legislature(2003 - 2004)
04/29/2004 09:05 AM Senate FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATE BILL NO. 313 "An Act making supplemental and other appropriations; amending appropriations; making an appropriation to capitalize a fund; and providing for an effective date." This was the third hearing for this bill in the Senate Finance Committee. Co-Chair Green reminded the Committee that during the previous hearing on this bill, the discussion focused on the Department of Natural Resources' and the Department of Revenue's involvement in the endeavor to further a natural gas pipeline. Amendment #5: This amendment inserts a new subsection into Section 14. DEPARTMENT OF NATURAL RESOURCES, page 20, line 11 as follows. ( ) The sum of $1,580,000 is appropriated from the general fund to the Department of Natural Resources for risk analysis related to the state gas pipeline and to bringing North Slope natural gas to market. ( ) The sum of $3,900,000 is appropriated from the general fund to the Department of Natural Resources for permitting and application processing related to the state gas pipeline right-of-way work related to bringing North Slope natural gas to market. In addition a new subsection is added to Sec. 16. DEPARTMENT OF REVENUE, page 21, line 11 as follows. ( ) The sum of $3,400,000 is appropriated to the Department of Revenue for work related to bringing North Slope natural gas to market from the following sources: General fund $2,400,000 Statutory designated Program receipts 1,000,000 ( ) The sum of $1,700,000 is appropriated to the Department of Revenue for work related to bringing North Slope natural gas to market from the following sources: General fund $1,200,000 Statutory designated Program receipts 500,000 For further clarification, the following language is included in the amendment. All the subsections added by this amendment are for capital projects and lapse under AS 37.25.020. The second subsection for the Department of Natural Resources, totaling $3,900,000, is effective July 1, 2004. The second subsection for the Department of Natural Resources, totaling $1,700,000, is effective July 1, 2004. Co-Chair Green moved to adopt Amendment #5. Co-Chair Wilken objected for explanation. Co-Chair Green explained that these funds would support the Departments' involvement in the gas line endeavor. Adoption of the amendment would oblige Governor Frank Murkowski's request "to move forward" in furthering the gas pipeline project. Co-Chair Wilken removed his objection. There being no further objection, Amendment #5 was ADOPTED. Co-Chair Wilken asked that the Legislative Legal and Research Services Division be allowed to make technical changes to SB 313 as deemed necessary. There being no objection, the request was approved. Co-Chair Green explained that, to date, $13 million of a total $15 million General Fund (GF) supplemental budget allowance that was included in the FY 2004 budget, has been allocated. In prior years, the supplemental appropriation request has been as much as $71 million. Tremendous effort has been undertaken regarding "what truly needs to be included and what truly is important" in determining the supplemental request amount that should be included in the appropriation budget. She voiced appreciation to State departments for the consideration given to the budgeting process, the amendments to the supplemental budget, and the supplemental requests that have been submitted. Co-Chair Green reviewed the projects that have been added to the bill thought the adoptions of Amendments #1 through #5. Senator Bunde commented that, even though he did not object to Amendment #5, he has concerns regarding the $10.5 million expenditure. He acknowledged that the excitement of developing a gas pipeline is a factor in the allowance of this request. However, he declared that were other departments to submit "generalities" as the Department of Natural Resources has, the Committee "would have been very critical" and would have demanded more detail. While other Departments "have been asked to be lean and mean and to do more with less," the Committee has been incredibly flexible and generous due to the nature of the request. In conclusion, he voiced the "hope that our hopes are not misguided." Co-Chair Green, noting that Senator Bunde had chaired the Department of Natural Resources budget subcommittee, commented that the overall Department budget is "lean and mean." It could be argued that the State could never do enough in its endeavor to develop its natural resources; and in that regard, the Department's budget has been "on the shy side" in recent years. The Department has stressed that it would attempt to generate revenue, would seek matching funds, and would use these funds in the best manner possible. She wished the Department success in its efforts to further the gas pipeline project. Senator Bunde agreed that the rest of Department's budget is lean and mean; however, he argued that the addition of the gas pipeline project funding would "dissipate" that leanness. He quoted that "bureaucracies' first goal is to maintain and expand itself." The Department would find a manner through which to expend every dollar that is provided to them. Co-Chair Wilken expressed confidence that the funds provided to support the gas pipeline endeavor would be fruitful; particularly as he respects the ability of Steve Porter, Deputy Commissioner, Department of Revenue, to utilize his private sector experience to further this endeavor. Senator Olson voiced that it might be unrealistic for the Departments to expend in excess of five million dollars on this project before the end of the FY 04 fiscal year in approximately 60 days. Co-Chair Green reminded the Committee of the Departments' testimony regarding the "time-sensitive" nature of the work relating to this request. Senator Olson voiced surprise that the Departments could spend approximately three million dollars a month in this endeavor. Senator Dyson shared Co-Chair Wilken's confidence that the Departments' project management team would be very "responsible in their stewardship" of this endeavor. He compared the endeavor of negotiating with the oil industry on this project to being a player "in the world's biggest poker game," in that it requires a tremendous amount of funds to play and that the rewards, while not guaranteed, "are worth the risk." He expressed that the State has reached a "critical juncture, and that opportunities such as this are rare and should not be missed. Senator Hoffman pointed out that the backup material specifies that several of the natural gas pipeline projects must be funded beyond the end of the FY 04 fiscal year. Co-Chair Green pointed out that the explanatory comments attached to Amendment #5 specify that $1.7 million of the Department of Revenue and $3.9 million of the Department of Natural Resources total requests would become available on July 1, 2004. Senator Hoffman observed that similar differential funding explanatory language is included in Amendment #4 for the Department of Law. Co-Chair Green concurred Senator Dyson reminded that the Senate Resources Committee has on contract, an internationally renowned resource professional who has independently endorsed the Legislature's actions in this endeavor. Senator Hoffman asked the total amount of general funds, federal funds, and other funds, including funds provided by Amendments #1 through #5 that would be appropriated in this supplemental bill. Co-Chair Green stated that this information would be provided. AT EASE: 9:20 AM / 9:21 AM Co-Chair Wilken moved to report SB 313, as amended, from Committee with individual recommendations and accompanying fiscal note. [NOTE: Due to technical difficulties, the following exchange was not recorded.] Senator Hoffman commented that this bill is an appropriation bill and as such has no accompanying fiscal note. Co-Chair Wilken acknowledged, and corrected his motion. AT EASE 9:21 AM / 9:22 AM [NOTE: Recording resumes.] Co-Chair Green commented, for the record, that there has been concern regarding payments for current and forthcoming long-term health care. The Department of Health and Social Services is attempting to rectify the situation in a manner that would incur the least negative impact on individuals. This bill contains authorization language that is required in order to release federal funds that are available. This concern is the result of "a delay in the payment" to certain vendors as opposed to "a non-payment" scenario. Senator Hoffman stated that a recent Anchorage Daily News newspaper article alluded that these funds were being withheld by the Legislative minority, as a negotiation tool. He declared, for the record, that he has not been involved in any such tactics in this regard. Co-Chair Green furthered declared that none of the Committee's members have participated in efforts in this regard. There being no objection to the motion, CS SB 313(FIN) was REPORTED from Committee. [NOTE: Co-Chair Wilken chaired the remainder of the meeting.] Co-Chair Wilken informed the Committee that the Constitutional Budget Reserve (CBR) fund balance at the beginning of the FY 04 fiscal year was $2.07 billion, and, according to a recent Legislative Finance Division projection, the balance on June 30, 2004 should be $2.4 billion. The increase is due to such things as a recovering stock market.